Residential Mobility and Unemployment of African Immigrants in France: A Calibration Approach

Abstract

We build and calibrate a model of simultaneous transitions on the housing and the labor market in order to account for the residual unemployment gap between African immigrants and non-immigrants in France. Our framework allows us to distinguish between the impact of ethnic-specific geographical preferences and ethnic-specific barriers to these two markets. The labor market accounts for about 85% of the residual unemployment gap, whereas the housing market accounts for about 75% of the ethnic differences in geographical location. Geographical preferences do not substantially impact the unemployment gap and account for about 25% of differences in residential location.

Ethnic unemployment rates and frictional markets

“…The results appear to be robust to various alternative calibration parameters and correspond to an unemployment difference between 1 and 1.5 percentage points, out of six percentage points. Decreuse and Schmutz (2012) find similar qualitative results as, in their study, spatial factors account for around 15% of the unemployment rate gap.…”

“…While Decreuse and Schmutz (2012) used a similar approach, we explicitly take space into account through the distances between dwellings and jobs, and do not restrict the analysis to a two-location framework. In particular, unemployed workers receive job offers with an associated commuting distance.…”

Public Housing Magnets: Public Housing Supply and Immigrants' Location Choices

“…These elements suggest there is a significant risk that immigrants in public housing may be trapped in cities with unfavourable labour market prospects. This mismatch between labour demand and the location choices of some immigrant groups at the regional level might help explain a significant share of the high unemployment rate of immigrants in France (Decreuse and Schmutz, 2012).…”

Spatial sorting of African Immigrants in the French Public Housing Market

“…According to the underlying job search models that motivate this theory, a rationed public housing market is quite likely to act as an unemployment trap. This seems particularly relevant for ethnic minorities, who have more trouble entering the private housing market because of discrimination (Bouvard et al 2009;Decreuse and Schmutz 2012;COMBES et al 2014). However, in one of the few econometric studies on France, Dujardin and Goffette-Nagot (2009) show that living in public housing does not seem to have a negative impact on employment probability, once taken the endogeneity of public housing into account.…”